Newsletter – 14th December 2017

Morning Bulletin

Yesterday

  • Theresa May lost her first Commons vote as Prime Minister as MPs backed an amendment to the EU withdrawal bill which means MPs now have a legal guarantee of a vote on the final Brexit deal struck with the EU.
  • Conservative rebels tipped the vote in favour of the amendment and one, Stephen Hammond who was party vice chairman, was sacked in the aftermath.
  • As expected, the Federal Reserve raised rates in the US by 25 basis points to <1.5% last night. The FOMC announced that its overall outlook for the US economy is positive with three rate hikes expected in 2018.
  • Sterling gained ground on the US dollar yesterday by 0.75% after opening at 1.3317 and closing at 1.3417.
  • GBP/EUR opened at 1.1337 and traded a high of 1.1385 before closing at 1.1343.
  • US CPI m/m came in as expected at 0.4% and core CPI came in slightly weaker at 0.1% vs 0.2% expected.
Overnight
  • Australian employment change surpassed expectations coming in at 61.6K vs 18.1K and the unemployment rate came in as expected at 5.4%. 
  • Chinese industrial production y/y and fixed asset investment ytd/y both came in as expected at 6.1% and 7.2%, respectively.
Today
  • Theresa May travels to Brussels to urge the 27 EU leaders to approve an agreement to move Brexit talks on to the second phase.
  • UK retail sales m/m came in better than expected at 1.1% vs 0.4% expected. Sterling has gained value against the other majors off the back of this.
  • We hear from the Bank of England at midday. The interest rate is expected to remain at 0.5% and the MPC votes are expected to be all in favour of no change.
  • The ECB rate is expected at 12:45 and is expected to remain unchanged.
Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1371 +0.25
GBP/USD 1.3436 +0.14
EUR/USD 1.1814 -0.09
AUD/USD 0.7656 +0.25

 

Time (GMT) Region Data Release Forecast Previous
12:00 GBP MPC Bank Rate Votes 9-0 9-0
12:00 GBP Monetary Policy Summary
12:00 GBP Official Bank Rate 0.50% 0.50%
12:45 EUR Minimum Bid Rate 0.00% 0.00%
13:30 EUR ECB Press Conference
13:30 USD Core Retail Sales m/m 0.6% 0.1%
13:30 USD Retail Sales m/m 0.3% 0.2%
13:30 USD Unemployment Claims 237K 236K